Friday, October 31, 2014

Black proposes chicken auction

Glenn Black of Providence Bay says Ontario chickens would be
better sold by auction than under the current cost-of-production pricing
formula.

He proposes an auction similar to the Dairy Farmers of
Ontario market-clearing auction for pricing quota.

He further suggests that the auction begin with the most
efficient producers – i.e. those with the lowest cost of production – and gradually
scale down to eventually cover all producers.

The Ontario Farm Products Marketing Commission, which is
reviewing the chicken board’s cost-of-production formula, is refusing to listen
to Black’s proposals.

It has also refused to provide information about its process
to Restaurants Canada and has denied that organization the right to participate
as an “intervenor” or to observe its deliberations.

Given the commission’s response to the powerful Restaurants
Canada organization – whose members rank second as buyers of Ontario chicken –
Black, who raises one bird a year, stands little chance of influencing the
outcome. Too bad because he pours a lot of research into the positions he takes.

Black writes on his blog, http://canadiansmallflockers.blogspot.com , that “currently there is false data
in the marketplace about supply and demand, and these are frequently
manipulated in a cyclic fashion so as to maximize the power and profits of the
various players.

“Due to vertical and horizontal integration of the supply-managed
(SM) chicken industry, the cost of capital systems, land, chicken feed, and
chicks can be easily manipulated, and are being manipulated so as to force the cost
of production (COP) to move in desirable directions; defeating any sense of
accurate price discovery by free market forces.

“SM was originally designed to give the lone family chicken
farmer the system under which they can unite against the powerful agriculture
& food conglomerates who had been using predatory practices against
individual farmers,” Black writes.

“Today, 99 per cent of those chicken farmers have been
forced out of business since 1921; majority of that reduction has occurred
during CFO's existence.

“The multi-national food and agriculture companies are even
more powerful than 50 years ago.The
Chicken Farmers of Ontario (CFO marketing board) has joined forces with their former enemy,
and have used their government-created monopoly as a weapon to extract maximum
profits for their special interest group out of the pocketbooks of Ontario
consumers.

“In short, COP has become a weapon of choice used against
the best interests of Ontario consumers.

“As an alternative to COP, we have proposed a simple public
auction system for live chicken so that buyers and sellers can achieve accurate
price discovery, and productivity and efficiency become the main driving forces
to help consumers get affordable chicken, while farmers and processors are
assured market stability and coverage of their costs and reasonable profit margins,”
he writes.

“This would eliminate the need for COP and its constant
tinkering each quota cycle at great cost, bias, and attempts to manipulate
unfairly.”